Morgan Sindall’s partnerships housing business wants to become £1bn-turnover business in as little as three years
Partnerships housing business Lovell is planning to double in size over the next few years, according to the firm’s London boss.
Morgan Sindall’s partnerships housing business – which trades under the Lovell brand – made an operating profit of £18.3m on turnover of just over £500m in the year to December 2019, according to results published last month.
However, Stuart Gibbons, managing director London & southern for Lovell Partnerships, said the business had an ambition to double in size in the next three to seven years, making it a £1bn turnover business.
In his London division specifically, Gibbons said he had a target to double turnover within four years, from £120m last year.
He told Housing Today: “Lovell is now approaching its 50th year in the residential partnership business, and at times our visibility in the London market hasn’t been as strong as we would have liked.
“We are now pushing to see how we can adapt the model and flex, to become a more land-led delivery business while maintaining some of our traditional work streams.”
Lovell Partnerships comprises a social housing contracting business and a mixed-tenure development business which works both in partnership with councils and housing associations, as well as developing its own schemes outright.
The mixed-tenure business completed 1,144 homes in 2019, at an average sales price of £238,000, however Lovell’s overall operating margin, running at 3.6%, is still closer to that of a contractor than a developer.
The ambition to grow the business has emerged following a shake-up in senior management in the past two years. Lovell’s overall MD Steve Coleby was poached from Laing O’Rourke in 2018. He brought in London boss Gibbon from Galliford Try later that year.
Last month Coleby hailed a turnaround in the business over the past year, with operating profit growing by 50% on 2018, when the firm was hit by a number of loss-making contracts.
The firm is, however, operating in an increasingly competitive field, with rivals such as Countryside, Keepmoat and Galliford Try Partnerships – now part of Vistry – also operating large partnerships businesses.
Last week Vistry announced plans to expand its annual completions to over 6,000 per annum, up from 3,867 at the moment.
Last week southern-based contractor and developer McLaren also announced plans to establish its own partnerships housing business.
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